A KPMG survey of more than 100 senior real estate professionals found a growing trend towards outsourcing as a result of fund administrators’ investing in real estate specific capabilities across people, process, technology and scale to enhance all aspects of service delivery.
According to the survey, the top two factors influencing the selection of fund administrators are expertise in real estate, 60 percent, and expertise with similar fund structures or portfolios, 58 percent. Approximately 84 percent of the respondents indicated that they outsource tax preparation and filing, generally to accounting firms.
“Providers are adopting different strategies, either through lift-outs or organic growth, to create a scalable business and capitalize on the needs of a growing marketplace,” said Phil Marra, National Real Estate Funds Leader, KPMG LLP. “The building of scale allows fund administrators to reduce the cost of delivery and make investments necessary to manage the complexities of expanding client portfolios.”
Greg Shaw, Director and Financial Services Lead for KPMG’s Shared Services & Outsourcing Advisory practice, added, “Service providers are recruiting and retaining talent with strong technical accounting expertise in real estate, while developing industry-leading processes specific to real estate fund managers. They are making investments in technology by acquiring or building platforms specific to real estate, reflecting the critical role these platforms are playing in delivering back-office real estate services.”
Important findings from the survey include:
For more information on survey results, please read Real Estate Fund Administration 2.0 – Insights From the 2018 Outsourcing Survey.
KPMG LLP, the audit, tax and advisory firm (www.kpmg.com/us), is the independent U.S. member firm of KPMG International Cooperative (“KPMG International”). KPMG International’s independent member firms have 189,000 professionals, including more than 9,000 partners, in 152 countries.